GST authorities have proposed prosecution against insurance intermediaries for allegedly generating fake invoices which are around 100 cr. rupees in the name of marketing and sales.
A Bengaluru based intermediary got prosecution notice in January from DGGI (Direct General of GST Intelligence). And the top management of film is been questioned. They have been asked to provide evidence of services against the invoices that they have generated.
Issuance of fake invoice demand punishment, which is of penalty and imprisonment if the amount is 5 cr. and above as per the section 122 of the central GST Act.
This move is to widen the investigation against the issuance company which say commission upto 70% to the online independency and offline agent.
The prescribed limit by IRDAI is 15% according to the source formed systematically set up with intermediaries to pan ineligible ITC in the name of the marketing services and raise fake invoices.
Two types of invoices are generated by intermediaries one is under the prescribed limit and other one is in the name of marketing and sales related spend.
A thorough investigation is happening and the department is remaining the invoices from both online marketplaces and offline brokerage. If they won't be able to explain the services they provide further more proceedings could be launched.
Last year, the DGGI detected a tax evasion of ?824 crore by 15 life and non-life insurance companies, and others as part of its probe. Many big insurance firms are under examination.
If you need any clarification regarding the GST law and its compliances for taxpayers, feel free to contact GST Professionals at ASC Group.
Source: Business Standard
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